During the World Islamic Banking Conference on Wednesday, MAS’s second-in-command, Jacqueline Loh, said countries throughout Asia, including Hong Kong, Singapore and Japan, were looking to increase their Islamic finance activities.
She pointed to work done by banks within the Arab States of the Gulf over recent years to expand operations in Asia by helping distribute Islamic funds to companies throughout the region. Work is also being done by the MAS, Loh said, to create “clarity and certainty” in the regulatory and tax treatment of sukuk.
Strong growth prospects
“Asia’s stronger growth prospects compared to developed economies present opportunities for higher investment returns, which would in turn increase the demand for Shariah-compliant assets in Asian markets, including Singapore, Malaysia and Indonesia,” she said.
Loh pointed to Mergermarkets most recent survey which said investments from Asia into the Gulf would soon equal that traditionally sourced from Europe, as Asian companies become more active in the Middle East.
“In the meantime, it will be important to continue to strengthen key foundations such as global regulatory standards and best practices for Islamic finance,” she added.
Islamic banking assets in Singapore have grown by 73% since 2010 and are increasingly cross-border in nature, MAS figures show.